Edgars pursues expansionist strategy

VICTORIA Falls Stock Exchange (VFEX) listed firm, Edgars Limited, says it is actively pursuing an expansion strategy aimed at broadening its geographic reach by launching new stores in carefully selected strategic locations.

As part of this initiative, the company successfully inaugurated a new Edgars store at the Ascot Shopping Centre in Bulawayo in March, marking a significant addition to its retail presence in the region.

Additionally, a new Jet Store has been opened in Harare, specifically at Hogerty Hill Mall, further enhancing the brand’s visibility and accessibility.

To cater to the needs of the low-income segment of the market, Edgars has introduced three Express Stores, which operate on a cash-only basis.

These stores are designed to provide affordable shopping options and convenient access for customers who may have limited access to credit facilities.

Edgars, which migrated its listing from the Zimbabwe Stock Exchange (ZSE) to the VFEX effective 5th of April 2024, indicated that the company has ambitious plans, with five more Express Stores expected to be established before the end of the calendar year, reflecting its commitment to serve this demographic effectively.

In light of the anticipated challenges posed by reduced electricity availability, the business will be focusing on strengthening its store power backup capabilities.

This initiative aims to ensure that customer experiences remain uninterrupted, even during power outages, while also managing the costs associated with generator usage. By taking these proactive measures, Edgars is dedicated to maintaining a high level of service quality for its customers despite external challenges.

“The Group seeks to expand its geographic footprint through the opening of new stores in strategic locations. In fulfilment of this drive, we opened a new Edgars store at Ascot Shopping Centre in Bulawayo in March 2024 and a new Jet Store in Harare, at Hogerty Hill Mall. To date, three Express Stores aimed at servicing the low-income segment of the market have been opened, selling only for cash.

“A further five are in the pipeline before close of year. The business will strengthen its store power back-up capabilities to safeguard customer experiences and contain generator costs in the light of projected reduced electricity availability in the outlook period,” said Edgars board chairperson, Thembinkosi Sibanda in the group’s 26 weeks financial review to July 2024.

Edgars noted that the increased dollarisation in the economy is projected to assist the business through improved access to foreign currency through domestic sales to cover import requirements, which will assist with improved stock availability in the stores.

In the latest performance report, Edgars total retail merchandise revenue reached US$ 13,2 million, reflecting a notable decline of 12,8 percent compared to the previous half year.

A significant portion of this revenue stemmed from ZWL credit sales, which accounted for an impressive 93,1 percent of total ZWL sales, a substantial increase from 51,2 percent reported in the same period of the previous year.

Meanwhile, USD credit sales contributed 73 percent to the overall USD sales, slightly up from 71 percent in the prior year.

Edgars chain, reported a turnover of US$8,3 million, representing a decrease of 5, 3 percent from the preceding half year.

The total units sold also experienced a decrease of 15,37 percent, dropping from 0,44 million in the previous period.

Within the ZWL sales framework for Edgars, the ZWL credit sales represented 73 percent of the total, a rise from 66 percent in the prior year.

On the other hand, USD credit sales constituted 71 percent of USD sales, a slight decrease from the previous 73 percent.

Jet chain, reported total sales of US$6,2 million, which marked a more significant decline of 17 percent compared to US$7 million achieved in the earlier half year.

The units sold for Jet also fell sharply, decreasing by 18,69 percent from 0.58 million.

Local currency credit sales played a dominant role, contributing 95,2 percent to the total ZWL sales, up from 56, 9 percent in the previous year.

Similarly, the USD credit sales accounted for 73 percent of total USD sales, a minor increase from 70.3 percent noted in the previous half year.

This comprehensive overview highlights the challenges faced by both chains in terms of sales performance while indicating a shift towards greater reliance on credit sales, particularly in the local currency.-ebsinessweekl